THe question is, does language affect the way we think about the reality of life? Is the fact that we tend to suggest a state of existence to "being" dead, make us avoid the real problem of ceasing to be? Does it encourage thought of an afterlife- a passing over, a passing away, rather than a full termination.
Or is it the case that because we tend to believe in an afterlife that we allow such wooly thinking to effect our language?

It is very much the same question you can ask when people use "WHY" when "HOW" is more appropriate to ask scientific questions; when the "why" asserts intentionality in nature.

Isn't death real? You can paraphrase it in "He exists in a state of death"

You can say that death is a thing that happened. But the whole point of death is that it is definable as the cessation , the termination of the existence of a person, so no there is no existence in death.

But you've simply taken one of the many definitions of "be" and applied it where it doesn't belong. Another definition from Merriam-Webster is "to have a specified qualification or characterization". So there's nothing weird about saying "He is dead".